Gina joined the ConsumerFi Podcast for a discussion on preparing business for sale, touching on subjects like how diversification can be a double-edged sword, the macro effects of the current day trading trend, and how to avoid accidental compliance that can lead to huge headaches down the road. Listen to the Podcast here. Gina and Joel reference the Middle Market Mergers & Acquisitions Podcast which offers actionable advice and strategies for selling your company and is aimed at owners of Middle Market companies in the financial services and business services sectors. Read the interview transcript: Joel Kennedy: You're listening to the ConsumerFi Podcast … [Read more...]
Rollover Equity: A Second Bite at the Apple
Rollover equity is a form of contingent consideration in which the sellers reinvest a portion of their proceeds into equity and ownership of the new or acquiring company. The main purpose of rollover equity is to align interests. The primary advantage of rollover equity for the selling party is it gives the owner(s) a second bite at the apple, meaning they get to participate in the equity appreciation of the combined entity. Rollover equity can usually be structured on a tax-deferred basis. From the buyer’s perspective, it ensures management is motivated and incentivized to hit their projections, and it reduces the amount of upfront cash the buyer has to fund to close the deal. In … [Read more...]
M&A Due Diligence: Legal (Part II of IV)
Before purchasing a company, the buyer should understand not only the financial risks associated with the acquisition, but also the legal risks. Some of the most important talking points Colonnade engages in with both parties' legal teams include gathering all relevant documents, reviewing tax history, reviewing intellectual property, and discussing past or outstanding litigation. Before moving into any sensitive discussion, be sure to establish confidentiality through a non-disclosure agreement. Relevant Documents A business may fit on a strategic basis, however upon further review of certain documents, the deal may be derailed. Items such as supplier contracts, leases, employment … [Read more...]